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Audit Experience and Guidance

Visit the AICPA website at the URL below.

http://www.aicpa.org/Professional+Resources/Accounting+and+Auditing/Audit+and+Attest+Standards/Authoritative+Standards+and+Related+Guidance+for+Non-Issuers/auditing_standards.htm

Print a copy of SAS 106 Audit Evidence. Write a report summarizing SAS 106. Your report should address the following questions:
1. What concept does this standard provide guidance concerning, and what standard does it supercede?
2. What is the effective date of the standard?
3. How does the standard define audit evidence?
4. How does the standard describe sufficient appropriate audit evidence?
5. The standard states that the reliability of audit evidence is influenced by its source. What are the five generalizations SAS 106 identifies concerning the reliability of audit evidence?
6. Financial statements contain a number of assertions about balances, classes of transactions, and disclosures.
a. Identify who makes these assertions.
b. List and describe each of the assertions regarding each financial statement component.
7. What is the purpose of Audit Procedures for Obtaining Audit Evidence? Briefly describe the seven procedures discussed in SAS 106.

Introductory paragraph describing the purpose of the report, each question retyped in bold followed by the answer to the question in normal type (without bold), a brief conclusion summarizing what you have learned by reading SAS 106 and how it relates to the discussion on audit risk

Solution Preview

Introductory paragraph describing the purpose of the report:

The purpose of this report is to summarize SAS 106 Audit Evidence. The SAS 106 is important because it provides guidance about the concepts relating to sufficient appropriate audit evidence, so that the auditor has a reasonable basis for giving an opinion on the financial statements that are being audited. This report will outline the guidance given by SAS 106, discuss the standard definition of audit evidence, what constitutes sufficient evidence, discuss assertions about balances, classes of transactions and disclosures and discus each assertion regarding financial statement component. The report will also discuss the objective of audit procedures for getting the audit evidence.

1. What concept does this standard provide guidance concerning, and what standard does it supersede? This standard provides guidance concerning the concept of audit evidence. It supersedes SAS No. 31.

2. What is the effective date of the standard? The effective date of the standard is December 15, 2006 but the standard allows earlier application.

3. How does the standard define audit evidence? The standard defines audit evidence as all the information used by the auditor in arriving at the conclusions on which the audit opinion is based and includes the information contained in the accounting records underlying the financial statements and other information.

4. How does the standard describe sufficient appropriate audit evidence? The standard describes sufficient appropriate audit evidence in the following manner. It defines sufficiency as the measure of quantity of audit evidence and appropriateness as the measure of quality of audit evidence. The standard defines these as the relevance and reliability in providing support for and detecting misstatements in transaction, account balances and disclosures and related assertions. The standard also mentions that a given set of audit procedures may provide audit evidence that is relevant to some assertions but ...

Solution Summary

This solution gives you a detailed discussion on SAS 106, AUDIT EVIDENCE

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